Employee Dishonesty Claim Over Two Policy Periods Limited to Single Occurrence
The Tennessee Appellate court took on a dispute between an insured and its insurance carrier regarding policy coverage limits under an “Employee Dishonesty” endorsement to a commercial general liability policy for an employee’s embezzlement of $100,000 spanning two policy years. While the policy limits were relatively low, $15,000 per claim/$30,000 aggregate, the stakes were high as the case raised an issue of first impression in Tennessee concerning the stacking of commercial liability policies. The insurer paid $15,000 finding it to be a single occurrence. The trial court found the policy ambiguous and ordered payment of the aggregate amount of $30,000. The Appellate Court found no such ambiguity, determined the policy was not a separate policy but a renewal of the prior year policy, the policy limit for employee dishonesty is $15,000 per occurrence and the claim involved one continuous occurrence over two years. It also ruled the policy prohibits “stacking” of coverage from one policy year to the next.